Did you receive any advance

salary or arrears of salary? If yes, you might be worried about the

tax implications of the same. Do I have to pay taxes on the total amount? What

about the tax calculations of the previous year and so on? Taxpayers who have

such questions in their mind, here is all that you need to know.

salary or arrears of salary? If yes, you might be worried about the

tax implications of the same. Do I have to pay taxes on the total amount? What

about the tax calculations of the previous year and so on? Taxpayers who have

such questions in their mind, here is all that you need to know.

By now, you would have already figured out

that income tax is calculated on the total income of a taxpayer for a certain

year. The income can either be in the form of salary or family pension or other

sources of income. However, there might be scenarios where you have received arrears

of family pension or pending salary during the current fiscal year. It can

happen that an income tax payer gets a part of his profit or salary in advance

or as arrears in any financial year, which increases his total income thereby

increase the payable taxes. In such a case, an application can be made and the

assessing officer can grant a relief to the tax payer. To sum it up, the Income

Tax Act ensures there is parity in the income tax slab rates, and thus, when a

portion of the income received does not pertain to the current year, a relief

is granted so that the taxable income does not increase.

that income tax is calculated on the total income of a taxpayer for a certain

year. The income can either be in the form of salary or family pension or other

sources of income. However, there might be scenarios where you have received arrears

of family pension or pending salary during the current fiscal year. It can

happen that an income tax payer gets a part of his profit or salary in advance

or as arrears in any financial year, which increases his total income thereby

increase the payable taxes. In such a case, an application can be made and the

assessing officer can grant a relief to the tax payer. To sum it up, the Income

Tax Act ensures there is parity in the income tax slab rates, and thus, when a

portion of the income received does not pertain to the current year, a relief

is granted so that the taxable income does not increase.

### Download Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E from the F.Y. 2000-01 to F.Y. 2019-20

To ensure that you are not burdened with

paying additional taxes, the income tax department provides Relief U/s

89(1). If you receive any pension or payments for the previous year, you will

not be taxed on the total amount for the current year. Essentially keeping you

away from paying extra taxes, because there was a delay in payment.

paying additional taxes, the income tax department provides Relief U/s

89(1). If you receive any pension or payments for the previous year, you will

not be taxed on the total amount for the current year. Essentially keeping you

away from paying extra taxes, because there was a delay in payment.

To avail the benefits under Section 89(1)

you would need to submit Form 10E. What is Form 10E would be the

most obvious question. The details of Form 10E, along with how and why to

submit the same is provided in detail below.

you would need to submit Form 10E. What is Form 10E would be the

most obvious question. The details of Form 10E, along with how and why to

submit the same is provided in detail below.

##
What is relief

under section 89(1)?

When the taxpayer receives:

1.

Arrears of salary or

Arrears of salary or

2.

Advance salary or

Advance salary or

3.

Arrears of family pension

Arrears of family pension

then such amount is taxable in the

Financial Year in which it is received.

Financial Year in which it is received.

However, relief under section 89(1) is

provided to reduce additional tax burden due to delay in receiving such

income.

provided to reduce additional tax burden due to delay in receiving such

income.

##
How to calculate

relief under section 89(1)?

Here are the steps to calculate relief

under section 89(1) of Income Tax Act, 1961:

under section 89(1) of Income Tax Act, 1961:

1.

Calculate tax payable on total income including arrears in

the year in which it is received.

Calculate tax payable on total income including arrears in

the year in which it is received.

2.

Calculate tax payable on total income excluding arrears in

the year in which it is received.

Calculate tax payable on total income excluding arrears in

the year in which it is received.

3.

Calculate difference between (1) and (2).

Calculate difference between (1) and (2).

4.

Calculate tax payable on total income of the year to which

arrears are related, including arrears.

Calculate tax payable on total income of the year to which

arrears are related, including arrears.

5.

Calculate tax payable on total income of the year to which

arrears are related, excluding arrears.

Calculate tax payable on total income of the year to which

arrears are related, excluding arrears.

6.

Calculate difference between (4) and (5).

Calculate difference between (4) and (5).

7.

The amount of relief will be the excess amount of (3) over

(6). No relief shall be allowed if the amount of (6) is more than the amount in

(3).

The amount of relief will be the excess amount of (3) over

(6). No relief shall be allowed if the amount of (6) is more than the amount in

(3).

###
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2019-20 With H.R.A. Exemption CalculationU/s 10(13A) + Automated Arrears

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and Form 16 Part A&B for F.Y. 2019-20

All in One TDS on Salary for Govt& Non-Govt Employees for the F.Y.

2019-20 With H.R.A. Exemption CalculationU/s 10(13A) + Automated Arrears

Relief Calculator U/s 89(1) with Form 10e fromthe Financial Year

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and Form 16 Part A&B for F.Y. 2019-20

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**8) Automated Arrears Relief Calculator U/s 89(1) from the**

Financial Year 2000-01 to Financial Year 2019-2020 ( Updated Version)

Financial Year 2000-01 to Financial Year 2019-2020 ( Updated Version)

##
Example on how

to calculate relief under section 89(1)

Mr. A has total income of Rs. 6,00,000/-

for Financial Year 2017-18 (Assessment Year 2018-19) and received arrears of

Rs. 1,50,000/- for Financial Year 2011-12 (Assessment Year 2012-13). The total

income for Financial Year 2011-12 is Rs. 2,00,000/-.

for Financial Year 2017-18 (Assessment Year 2018-19) and received arrears of

Rs. 1,50,000/- for Financial Year 2011-12 (Assessment Year 2012-13). The total

income for Financial Year 2011-12 is Rs. 2,00,000/-.

The relief will be calculated as follows:

1.

Tax on total income of Rs. 7,50,000/- (Rs. 6,00,000+Rs.

1,50,000) including arrears for F.Y. 2017-18 is Rs. 64,375/- (as per rates

applicable for F.Y. 2017-18 i.e. A.Y. 2018-19).

Tax on total income of Rs. 7,50,000/- (Rs. 6,00,000+Rs.

1,50,000) including arrears for F.Y. 2017-18 is Rs. 64,375/- (as per rates

applicable for F.Y. 2017-18 i.e. A.Y. 2018-19).

2.

Tax on total income of Rs. 6,00,000/- excluding arrears for

F.Y. 2016-17 is Rs. 33,475/-

Tax on total income of Rs. 6,00,000/- excluding arrears for

F.Y. 2016-17 is Rs. 33,475/-

3.

Difference between (1) and (2) is Rs. 30,900/- (as per

rates applicable for F.Y. 2017-18 i.e. A.Y. 2018-19).

Difference between (1) and (2) is Rs. 30,900/- (as per

rates applicable for F.Y. 2017-18 i.e. A.Y. 2018-19).

4.

Tax on total income of Rs. 3,50,000/- (Rs. 2,00,000+Rs.

1,50,000) including arrears for F.Y. 2011-12 is Rs. 17,510/- (as per rates

applicable for F.Y. 2011-12 i.e A.Y. 2012-13).

Tax on total income of Rs. 3,50,000/- (Rs. 2,00,000+Rs.

1,50,000) including arrears for F.Y. 2011-12 is Rs. 17,510/- (as per rates

applicable for F.Y. 2011-12 i.e A.Y. 2012-13).

5.

Tax on total income of Rs. 2,00,000/- excluding arrears for

F.Y. 2011-12 is Rs. 2,060/- (as per rates applicable for F.Y. 2011-12 i.e

A.Y. 2012-13).

Tax on total income of Rs. 2,00,000/- excluding arrears for

F.Y. 2011-12 is Rs. 2,060/- (as per rates applicable for F.Y. 2011-12 i.e

A.Y. 2012-13).

6.

Difference between (4) and (5) is 15,450/-

Difference between (4) and (5) is 15,450/-

7.

The amount of relief will be Rs. 15,450/- [excess amount of

(3) over (6)]

The amount of relief will be Rs. 15,450/- [excess amount of

(3) over (6)]

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